Competition to supply low-carbon electricity to California and the Mountain West is opening the door for electric power projects that combine the use of natural gas and renewable energy.
For the state of Wyoming and the developer of a proposed 600-megawatt wind-and-gas power project at an abandoned missile site outside Cheyenne, boosting energy sales to Western markets means creating export potential for something other than Powder River Basin coal.
The CEO of Jackson Hole, Wyo.-based Morley Cos. has been at it for years, and with mixed results.
"It’s not for the faint of heart," said Bruce Morley, whose company proposed the $750 million wind-and-gas hybrid plant for a 12,000-acre site partly owned by the city. Morley is still in the early stages of negotiations with potential customers and hasn’t announced a funding source.
Morley has weathered the renewable energy market’s wild yo-yo swings for 30 years. The 2008 recession ended a $500 million wind farm project that Morley had worked on with Colorado State University. The 150-turbine wind farm proposed at the Cheyenne site has been in the planning stages since 2011. It’s two years behind schedule.
But the company’s latest project rests on the assumption that this is a new era, and renewable energy projects, big and small, will benefit from rising demand. The combination of wind or solar power and gas-fired generation has emerged as an option for states looking for more access to lower-carbon electricity. States across the West are studying compliance options for U.S. EPA’s proposed Clean Power Plan, which requires states to meet targets for cutting power-sector carbon emissions through 2030.
Marketing electricity from Morley’s proposed plant — 300 MW of wind power combined with a 300 MW gas-burning generator — to California, Colorado and other states in the region is critical to attracting a big enough customer base to move forward with the project, said Morley and Loyd Drain, executive director of the Wyoming Infrastructure Authority.
Interest in states looking to increase their renewable energy portfolios, plus the falling price tags for wind turbines and solar panels, is playing a role in the way Wyoming is analyzing the market potential for cleaner energy sources. Wind constitutes 8 percent of Wyoming’s energy, making it the second-biggest energy source after coal.
For its part, the Wyoming Infrastructure Authority, or WIA, has sponsored numerous studies about the prospects for selling power to regional markets such as California (Greenwire, March 26, 2014).
Challenges, though, lie in California Gov. Jerry Brown’s (D) stated preference for using in-state renewable generation before purchasing power from its neighbors. A 2014 study conducted by the National Renewable Energy Laboratory (NREL), sponsored by WIA, estimated that California could save as much as $1 billion a year in costs to meet renewable energy goals if electric transmission lines were built to access wind resources in Wyoming.
Meanwhile, Morley is nurturing potential contracts to ship power to Colorado.
Shipping hybrid energy
Another hiccup lies in how much transmission will be available to export Wyoming wind power, as wind power project developers jockey for capacity on those lines.
TransWest Express, for example, is a proposed high-voltage transmission line that would ship power from the proposed 3,000 MW Chokecherry and Sierra Madre wind project in Carbon County, Wyo., to the Desert West. The massive project could funnel wind and gas generation to the California market, Morley said (ClimateWire, Aug. 14, 2014). He also noted that another proposed transmission project, called the Gateway West through Wyoming and Idaho, also raises prospects for shipping more generation out of Wyoming (Greenwire, Dec. 18, 2014).
The short-term goal, Morley said, rests with an existing Xcel Energy Inc.-owned interstate transmission line that runs into Colorado.
Morley is riding on hopes that EPA’s proposed carbon regulations will persuade potential investors to jump on board.
The technology is "out there on the shelf," Morley said, referring to the combination of intermittent resources like wind and solar with baseload gas generation. Similar projects are under development in Florida, fusing solar and gas to produce electricity.
For Wyoming, where coal and wind supply much of its power, this could help gas and renewable energy hybrid plants thrive while meeting the state’s requirements to cut its power-plant emissions rate 19 percent between 2012 and 2030.
Wyoming Department of Environmental Quality spokesman Keith Guille said it’s too soon to say what action the energy-rich state will take to comply with the EPA carbon plan. Its emissions targets are notably less stringent than those of other states. All the while, Wyoming’s big coal industry has a stake in preserving markets for coal.
Land and money hurdles
Market conditions aside, Morley is wrestling with land issues.
Morley has yet to lease the rest of the land he needs to build the plant from Wyoming’s Office of State Lands and Investments and file a project permit with Wyoming’s Department of Environmental Quality.
Contamination from trichloroethylene (TCE) is being cleaned up at the site Morley already leased from the city of Cheyenne three years ago. The popular cleaning chemical, which was used to bathe nuclear missiles in the 1950s and 1960s, leaked from a former nuclear site.
The Army Corps of Engineers heads the cleanup efforts. Morley’s project has to avoid interfering, said Jeffrey Skog, Army Corps project manager, as part of the lease agreement Morley signed with the city. It’s unclear how Morley would navigate around the contamination site, but he asserted that the turbines are "easily moved."
The municipal ownership of the land and potentially private funding for the project could preclude an environmental analysis under the National Environmental Policy Act, according to DEQ spokesman Guille. Morley hopes to begin his environmental analysis with the help of WDEQ this year to ensure he won’t step on any regulatory toes, including effects on birds like the golden eagle (Greenwire, Feb. 13, 2014).
Funding is another potential hitch in the plan.
The Wyoming Infrastructure Authority has expressed support for the project, and General Electric Co., the University of Wyoming and the University of Colorado are conducting engineering studies to test the project’s viability at high altitude.
WIA’s Drain said the state-sponsored economic development group could be a potential funding source as long as Morley secures power purchase agreements from customers and a long-term revenue plan. Morley asserts that the project would generate tens of millions of dollars for the state of Wyoming from sales tax revenues on equipment to royalties paid to the city of Cheyenne.
"We have possibly the best wind in the country and the lowest-priced gas in the country, if not the world," Morley said. "So why not use our raw minerals and export it?"
Wyoming’s wind capacity boasts up to a 40 to 50 percent capacity, more than any other state, Drain said. But the unpredictable gusts blow in late afternoon and nighttime, leaving big gaps in electricity production. Battery storage is developing fast but remains expensive.
Morley is confident that the 300 MW gas plant on site will iron out the power production when the wind doesn’t blow. He hopes to have the plant up and running in 2018.
"There’s no deal-breaking hurdles here," Morley said.